Kalikas v. American
Contractors Indemnity Co.
Filed 1/27/14 Kalikas v. American Contractors Indemnity Co.
CA4/1
OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a),
prohibits courts and parties from citing or relying on opinions not certified
for publication or ordered published, except as specified by rule
8.1115(b). This opinion has not been
certified for publication or ordered published for purposes of rule 8.1115.
COURT OF APPEAL, FOURTH APPELLATE DISTRICT
DIVISION ONE
STATE OF CALIFORNIA
ANTHONY
KALIKAS,
Plaintiff, Cross-defendant and
Appellant,
v.
AMERICAN
CONTRACTORS INDEMNITY COMPANY,
Cross-defendant and Appellant;
JOHN
MASTRODIMOS,
Defendant and Respondent;
WILLIAM
MASTRODIMOS et al.,
Defendants, Cross-complainants and
Respondents.
D062567
(Super. Ct. No.
37-2011-00088987-CU-FR-CTL)
APPEAL
from a judgment of the Superior Court of
San Diego County, Ronald L. Styn and Frederick L. Link, Judges. Affirmed.
Anthony
E. Kalikas, in pro. per., for Plaintiff, Cross-defendant and Appellant.
Law
Office of Anthony E. Kalikas and Anthony E. Kalikas for Cross-defendant and
Appellant.
The
Stone Law Group, Kenneth H. Stone and Rebecca Reed for Defendant and
Respondent; and for Defendants, Cross-complainants and Respondents.
Anthony
E. Kalikas and American Contractors Indemnity
Co. (together Cross-defendants) appeal a judgment entered against them on the
cross-complaint for wrongful attachment filed by defendants William (Bill)
Mastrodimos and Margaret O'Byrne, as cotrustees of the Mastrodimos/O'Byrne
and William Mastrodimos, as trustee of the Country
Comfort Trust (CC Trust) (together Defendants). On appeal, Cross-defendants contend the trial
court erred (1) in interpreting Civil Code section 3439.07
not independently authorizing the provisional attachment of Defendants'
property pending Kalikas's fraudulent transfer action against them, and (2)
finding Kalikas wrongfully levied on Defendants' property. Based on our reasoning below, we conclude the
trial court correctly interpreted
section 3439.07 and found Kalikas wrongfully attached Defendants' property.
FACTUAL AND PROCEDURAL BACKGROUND
In
July 2010, John Mastrodimos (John) transferred his 50 percent interest in
certain real property to the Family Trust.
shares of stock in Country Comfort Restaurant, Inc., to the CC Trust.
On
or about November
1, 2010, John retained Kalikas to represent
him in a lawsuit filed against him and other defendants. In March 2011, John apparently had an unpaid
balance of attorney fees owed to Kalikas and refused to sign a substitution of
attorney form allowing Kalikas to withdraw as his attorney. In April, Kalikas filed the instant action
against John, William and Defendants, alleging causes of action for fraudulent
conveyance, concealment, and interference with contractual relations. The fraudulent
John transferred his assets, including the real property interest and shares of
stock described above, to the named defendants to defraud creditors, including
Kalikas.
In
conjunction with his lawsuit, Kalikas filed an ex parte application for a right
to attach order and order for issuance of a writ of attachment. His application sought a writ of attachment
against Defendants' interests in the real property and shares of stock
described above. In support of his
application, Kalikas submitted his declaration stating that "[u]nder . . .
§ 3439.07, a creditor who establishes the probable validity of his claim
for fraudulent transfer is entitled to petition the trial court for issuance of
an order granting a writ of attachment against the asset fraudulently
transferred, or other provisional remedy, including but not limited to an
injunction against further disposition by the debtor or a transferee of the
asset fraudulently transferred or its proceeds." The trial court (San Diego County Superior
Court Judge Ronald L. Styn) issued the ex parte right to attach order and order
for issuance of writ of attachment, as Kalikas requested. On April 19, 2011,
the court's clerk issued an ex parte writ of attachment against Defendants'
interests in the real property and shares of stock described above.
In
June 2011, Defendants filed an application to set aside the right to attach
order, quash the writ of attachment, and release the attached property. They argued that because Kalikas's claims
against them were not alleged to be based on a contract, there was no basis
under Code of Civil Procedure section 483.010 for a writ of attachment to be
issued against their property. Kalikas
opposed Defendants' application, conceding there never was any contract with
Defendants on which to base a writ of attachment under Code of Civil Procedure
section 481.010 et seq. However, Kalikas
argued a writ of attachment was authorized under section 3439.07, which
provides for attachment of property in connection with fraudulent transfer
actions. He cited the following language
in that statute: "(a) In an action for relief against a transfer or
obligation under this chapter, a creditor . . . may obtain: [¶] . . .
[¶] (2) [a]n attachment or other provisional remedy against the asset
transferred or its proceeds in accordance with the procedures described in Title 6.5 (commencing with Section 481.010)
of Part 2 of the Code of Civil Procedure."
(§ 3439.07, italics added.)
He argued that language is a substantive provision authorizing
attachment of property subject only to the procedural, and not substantive,
provisions of Code of Civil Procedure section 481.010 et seq. In reply, Defendants argued section 3439.07,
subdivision (a)(2), does not provide an independent substantive basis for
attachment of property and Kalikas was required to satisfy the substantive
requirements of Code of Civil Procedure section 483.010 to obtain the writ of
attachment against their property.
The
trial court granted Defendants' application and issued an order (Order) setting
aside the right to attach order, quashing the writ of attachment, and releasing
the property levied on pursuant to the writ of attachment. The court disagreed with Kalikas's proposed
interpretation of section 3439.07. It
considered the language of Code of Civil Procedure section 483.010 and section
3439.07. It quoted section 3439.07,
subdivision (b), which provides: "If a creditor has commenced an action on
a claim against the debtor, the creditor may attach the asset transferred or
its proceeds if the remedy of attachment is available in the action under
applicable law and the property is subject to attachment in the hands of the
transferee under applicable law."
Noting section 3439.07, subdivision (a)(2), sets forth the provisional
remedy of attachment available to a creditor, the court concluded section
3439.07, subdivision (b), "specifically limits the remedy of attachment
available to a creditor on a claim against a debtor (as in this case), to
instances where 'the remedy of attachment is available in the action under
applicable law.' The 'applicable law' in
this instance is [Code of Civil Procedure section] 483.010[,] which
specifically limits attachments to actions based upon a [contract.] In general, the court interprets [section]
3439.07[, subdivisions] (a)(2) and (b) as expanding a creditor's right of
attachment only to property not in the name of the debtor. The court does not interpret this section as
also eliminating the statutory requirements for attachment. . . . Absent [Kalikas's] pursuit of a claim based
on [a] contract against William Mastrodimos, attachment is not available, and
the . . . Right to Attach Order must be set aside."
Defendants
and William then filed a cross-complaint against Cross-defendants (i.e.,
Kalikas and American Contractors Indemnity Co., the bonding company that issued
the undertaking for Kalikas's writ of attachment against Defendants' property),
alleging a cause of action for wrongful attachment of their property. Attached to Defendants' cross-complaint were
copies of the undertaking and the notice of attachment and writ of attachment
that Kalikas had recorded with the San Diego County Recorder's Office.
Defendants,
John and William filed a motion for summary judgment or, in the alternative,
summary adjudication of issues.
Defendants sought summary adjudication of their cross-complaint for
wrongful attachment against Cross-defendants, citing the Order that found
Kalikas's attachment of Defendants' property was not authorized under Code of
Civil Procedure section 483.010. Cross-defendants
opposed the motion. Although the trial
court denied the motion for summary judgment, it granted Defendants' motion for
summary adjudication of their cross-complaint for wrongful attachment and found
Defendants incurred $4,870 in attorney fees and costs as a result of the
wrongful attachment. The court rejected Cross-defendants'
argument that Kalikas did not levy on Defendants' property, finding his
recording of the notice of attachment and writ of attachment with the county
recorder was a levy on their property.
Following
a trial on the remaining causes of action, the trial court (San Diego County
Superior Court Judge Frederic L. Link) entered a judgment for Defendants, John
and William and awarded Defendants $4,870 against Cross-defendants. Cross-defendants timely filed a notice of
appeal.
DISCUSSION
I
Construction
Because
the crux of this case involves interpretation of statutory language, we briefly
review the rules for statutory construction.
The California Supreme Court has set forth general rules for
interpreting language in a statute, stating:
"We begin with the fundamental rule that a
court 'should ascertain the intent of the Legislature so as to effectuate the
purpose of the law.' [Citation.] In determining such intent '[t]he court turns
first to the words themselves for the answer.'
[Citation.] We are required to
give effect to statutes 'according to the usual, ordinary import of the
language employed in framing them.'
[Citations.] 'If possible, significance
should be given to every word, phrase, sentence and part of an act in pursuance
of the legislative purpose.' [Citation.]
. . . [Citation.] 'When used in a statute [words] must be
construed in context, keeping in mind the nature and obvious purpose of the
statute where they appear.'
[Citations.] Moreover, the
various parts of a statutory enactment must be harmonized by considering the
particular clause or section in the context of the statutory framework as a
whole." (Moyer v. Workmen's Comp. Appeals Bd. (1973) 10 Cal.3d 222, 230.)
When
the statutory language is clear and unambiguous and thus not reasonably
susceptible of more than one meaning, we adopt the plain meaning of the
language and need not apply rules of construction. (People
v. Leal (2004) 33 Cal.4th 999, 1007.)
We decline to follow the plain meaning of a statute only when it would
inevitably frustrate the manifest purposes of the legislation as a whole or
lead to absurd results. (
884, superseded by constitutional amendment on another ground as noted in
877, 885.) "We may not, under the
guise of construction, rewrite the law or give the words an effect different
from the plain and direct import of the terms used." (
Assn. v. City of Los Angeles (1995) 11 Cal.4th 342, 349.)
"[S]tatutory language is generally the most reliable indicator of
legislative intent." (
"When used in a statute[,] words must be construed in context,
keeping in mind the nature and obvious purpose of the statute where they
appear, and the various parts of a statutory enactment must be harmonized by
considering the particular clause or section in the context of the statutory
framework as a whole." (
5.) In the context of construing
attachment statutes, we construe those statutes narrowly. "Our starting point is the rule that the
Attachment Law statutes (Code Civ. Proc., § 481.010 et seq.) are subject
to strict construction because they are purely the creation of the Legislature." (Vershbow
v. Reiner (1991) 231 Cal.App.3d 879, 882; see also Epstein v. Abrams (1997) 57 Cal.App.4th 1159, 1168.)
The
proper interpretation of a statute is a question of law for our independent
determination. (People ex rel. Lockyer v. Shamrock Foods Co. (2000) 24 Cal.4th 415,
432; California Teachers Assn. v. San
Diego Community College Dist. (1981) 28 Cal.3d 692, 699;
521, 530.) Likewise, the application of
a statute to undisputed facts is a question of law, subject to our de novo, or
independent, review on appeal. (
Feddersen & Co. (1995) 9 Cal.4th 606, 611; Lozada v. City and County of San Francisco (2006) 145 Cal.App.4th
1139, 1149; Seligsohn v. Day (2004)
121 Cal.App.4th 518, 522-523.)
II
"In
California, 'attachment' is a pure statutory remedy [citation] activated by a
plaintiff, under which the property of a defendant is 'seized' by legal process
in advance of trial and judgment."
(Randone v. Appellate Department
(1971) 5 Cal.3d 536, 543, fn. omitted.) "A
writ of attachment allows a plaintiff, in certain prescribed instances, to
obtain a pretrial seizure of the property of the defendant-debtor. [Citation.]
A suspect who suspects that the defendant-debtor has fraudulently
transferred assets in order to become judgment proof may also enforce its claim
against the transferred property by way of a writ of attachment. ([§ 3439.07, subds. (a)(2), (b);
citation].)" (Whitehouse v. Six Corp. (1995) 40 Cal.App.4th 527, 533.) " 'The Legislature has determined
attachments may properly issue only to secure anticipated recoveries on
contract claims in fixed or readily ascertainable amounts. ([Code Civ. Proc.,] § 483.010, subds.
(a) and (b).)' " (
(1999) 69 Cal.App.4th 1261, 1277.)
California's
attachment laws are generally found at Code of Civil Procedure section 481.010
et seq. (Attachment Law). Importantly in
this case, Code of Civil Procedure section 483.010, subdivision (a), provides:
"Except
as otherwise provided by statute, an
attachment may be issued only in an action on a claim or claims for money, each
of which is based upon a contract, express or implied, where the total
amount of the claim or claims is a fixed or readily ascertainable amount not
less than five hundred dollars ($500) exclusive of costs, interest, and
attorney's fees." (Italics added.)
On issuance by a trial court of a right to
attach order and writ of attachment (see e.g., Code Civ. Proc.,
§§ 485.220, 485.540, 488.010), the levying officer (e.g., county sheriff)
shall serve a copy of the writ of attachment and a notice of attachment on the
defendant. (Code Civ. Proc.,
§ 488.305.) "To attach real
property, the levying officer shall comply with [Code Civ. Proc.] [s]ection
700.015 and the recorder shall index the copy of the writ of attachment and a
notice of attachment as provided in that section." (Code Civ. Proc., § 488.315.) If a plaintiff obtains a writ of attachment
not authorized by the Attachment Law, a defendant has a cause of action against
the plaintiff for wrongful attachment.
(Code Civ. Proc., § 490.010 et seq.)
In
actions for fraudulent transfers, section 3439.07, subdivisions (a) and (b),
provide:
"(a) In an action for relief against a transfer or
obligation under this chapter, a creditor . . . may obtain:
"(1)
Avoidance of the transfer or obligation to the extent necessary to satisfy the
creditor's claim.
"(2)
An attachment or other provisional remedy
against the asset transferred or its proceeds in accordance with the procedures
described in Title 6.5 (commencing with Section 481.010) of Part 2 of the Code
of Civil Procedure.
"(3)
Subject to applicable principles of equity and in accordance with applicable
rules of civil procedure, the following:
"(A)
An injunction against further disposition by the debtor or a transferee, or
both, of the asset transferred or its proceeds.
"(B)
Appointment of a receiver to take charge of the asset transferred or its
proceeds.
"(C)
Any other relief the circumstances may require.
"(b) If a
creditor has commenced an action on a claim against the debtor, the creditor
may attach the asset transferred or its proceeds if the remedy of attachment is
available in the action under applicable law and the property is subject to
attachment in the hands of the transferee under applicable law." (Italics added.)
If the creditor in a fraudulent transfer
action obtains a judgment against the defendant-debtor, the creditor may then
levy execution on the transferred asset or its proceeds. (§ 3439.07, subd. (c).)
III
3439.07
Cross-defendants
contend the trial court erred in interpreting section 3439.07 as not
independently authorizing a provisional attachment of Defendants' property
pending Kalikas's fraudulent transfer action against them. They assert section 3439.07 sets forth
substantive provisions for issuance of writs of attachment independent of any substantive requirements for issuance of writs
of attachment under Code of Civil Procedure section 483.010, and therefore
Kalikas's lack of a contract claim against Defendants or William did not preclude
him from attaching Defendants' property pursuant to section 3439.07.
Applying
the rules for statutory construction discussed above, we conclude the trial
court correctly interpreted section 3439.07 as not providing any authority for
issuance of writs of attachment without compliance with the substantive
provisions of Code of Civil Procedure section 483.010. The crux of Cross-defendants' argument is
based on section 3439.07, subdivision (a)(2)'s provision allowing a plaintiff
in a fraudulent transfer action to obtain an "attachment . . .
against the asset transferred or its proceeds in accordance with the
(commencing with Section 481.010) of Part 2 of the Code of Civil Procedure
[i.e., the Attachment Law]."
(Italics added.) They argue that
because section 3439.07 requires plaintiffs to only comply with the "procedures"
of the Attachment Law, the substantive provisions of the Attachment Law do not
apply to attachments of property pursuant to section 3439.07. We disagree.
In
their papers below and briefs on appeal, Cross-defendants wholly omit
section 3439.07, subdivision (b), which provides: "If a creditor has
commenced an action on a claim against the debtor, the creditor may attach the
asset transferred or its proceeds if the
remedy of attachment is available in the action under applicable law
the hands of the transferee under applicable law."
language, we must give effect to every word and phrase and consider each clause
or provision together with the other clauses and provisions in the same statute
and other related statutes. (
3439.07, subdivision (b), in interpreting the language of section 3439.07,
subdivision (a)(2), and in determining whether that latter subdivision sets
forth an independent substantive provision for attaching property in fraudulent
transfer actions regardless of the substantive requirements for writs of
attachment set forth in the Attachment Law.
We
believe section 3439.07, subdivision (b)'s language referring to attachments
available "under applicable law" necessarily refers to statutory
provisions for attachments other than
those set forth in that statute (i.e., § 3439.07). That "applicable law" generally
will be the Attachment Law, which includes Code of Civil Procedure section
483.010.
3439.07 as a whole, it provides for provisional attachments of assets alleged
to have been fraudulently transferred "in accordance with the
Attachment Law "if the remedy of
attachment is available in the action
under applicable law and the property
is subject to attachment in the hands of the transferee under applicable law." (§ 3439.07, subds. (a)(2), (b), italics
added.) We conclude, contrary to Cross-defendants'
assertion, section 3439.07, subdivision (a)(2), does not provide any independent substantive provision for attachment of
property in fraudulent transfer actions regardless of the substantive
requirements for writs of attachment set forth in the Attachment Law (or
another applicable law authorizing attachment of property).
We
further conclude the term "procedures" as used in section 3439.07,
subdivision (a)(2), cannot, as Cross-defendants assert, be construed narrowly
to refer to only those technical steps required to effect an attachment and not
substantive requirements for attachment.
Rather, the term "procedures" should be construed as referring
to both the technical and substantive provisions
of the Attachment Law.
name="_ftnref5" title="">[5] The plain and clear meaning of the language
of section 3439.07 does not support Cross-defendants' position.
authority in support of their position and do not persuade us to conclude
otherwise.
Because
Cross-defendants conceded below that Kalikas did not satisfy the requirements
of Code of Civil Procedure section 483.010 and the requirement that his claim
be for money based on a contract (or the requirements of any other applicable
law authorizing attachment), the trial court correctly concluded Kalikas
wrongfully attached Defendants' property and properly issued the Order that set
aside the right to attach order, quashed the writ of attachment, and released the
property levied on pursuant to the writ of attachment. As discussed above, section 3439.07 did not
provide Kalikas with an independent substantive basis for attaching Defendants'
property in connection with his fraudulent transfer action against them.
IV
Cross-defendants
contend the trial court erred by granting Defendants' motion for summary
adjudication of their cross-complaint for wrongful attachment because Kalikas
did not levy on Defendants' property.
Code of Civil Procedure section 490.010, subdivision (a), provides for
an action for wrongful attachment where "[t]he levy under a writ of attachment or the service of a temporary
protective order in an action in which attachment is not authorized." (Italics added.) Assuming arguendo the mere issuance of a writ
of attachment of property does not constitute a "levy under a writ of attachment"
under Code of Civil Procedure section 490.010, subdivision (a), any further
measure taken to secure or "perfect" the attachment of property in
accordance with the Attachment Law constitutes a "levy" on that
property.
order and writ of attachment, the "levying officer" (e.g., county
sheriff) shall serve a copy of the writ of attachment and a notice of
attachment on the defendant. (Code Civ.
Proc., § 488.305.) Also, "[t]o
attach real property, the levying officer shall comply with [Code Civ. Proc.]
[s]ection 700.015 and the recorder shall index the copy of the writ of
attachment and a notice of attachment as provided in that section." (Code Civ. Proc., § 488.315.) The actions by the levying officer constitute
levying on the attached property.
In
this case, the undisputed facts show Kalikas levied on Defendants'
property. Defendants' separate statement
of undisputed facts assert Kalikas levied on their property. In support of that assertion, Defendants'
submitted William's declaration, in which he stated: "[P]roperty described
in the Writ of Attachment and Order for Issuance of Writ of Attachment was
levied upon. A true and accurate copy of
the Notice of Attachment filed with the San Diego County Recorder's Office is
lodged herewith as Exhibit F."
Defendants lodged with the court that Exhibit F, which reflects the
recording of the notice of attachment with the San Diego County Recorder's
Office on April 20, 2011, as document No. 2011-0206948.
In
opposing Defendants' motion for summary adjudication of their cross-complaint
for wrongful attachment, Cross-defendants argued Kalikas did not levy on
Defendants' property. In support of
their argument, they cited a conclusory statement in Kalikas's declaration that
he did not levy on Defendants' property.
Kalikas declared: "After obtaining the writ of attachment and right
to attach order, I never took any other action to actually levy against the
property described in the writ of attachment and right to attach order prior to
the date when this Court quashed the writ of attachment."
However,
Kalikas's declaration did not refute Defendants' evidence showing the notice of
attachment of their property was recorded with the San Diego County Recorder's
Office before the writ of attachment
was quashed by the trial court. As noted
above, the notice of attachment was recorded on April 20, 2011. The Order that quashed the writ of attachment
was not issued until July 11, 2011.
Therefore, it is undisputed the notice of attachment was recorded with
the San Diego County Recorder's Office by the levying officer (i.e., the San
Diego County Sheriff) in accordance with Kalikas's instructions. We conclude, as did the trial court, that this
action by Kalikas constituted a wrongful levy on Defendants' property within
the meaning of Code of Civil Procedure section 490.010. Cross-defendants do not cite any case or
other authority persuading us to reach a contrary conclusion. The trial court correctly granted Defendants'
motion for summary adjudication of their cross-complaint for wrongful
attachment.
DISPOSITION
The
judgment is affirmed. Defendants are
entitled to costs on appeal.
McDONALD, J.
WE CONCUR:
BENKE, Acting P. J.
IRION, J.
name="_ftn1" title="">[1] All further statutory
references are to the Civil Code unless otherwise specified.
name="_ftn2" title="">[2] To avoid confusion,
we refer to John Mastrodimos and William (Bill) Mastrodimos by their first
names.
